by Shane Ormond
On May 10, 2019
Earlier this month, it seemed like the Chinese trade negotiations would come to an amicable end any day now. But after some unexpected pushback from Beijing, the U.S. is ratcheting up the pressure with tariffs of 25% on more than $200 billion of Chinese goods.
- The unexpected side effect of legalized weed… and how to make money from it.
- Big pharma plays dirty… causing painkiller stocks to tank
- Eli Lilly offers consumers an olive branch… but is it too little too late?
- Could this scrappy underdog be an NFL-Killer?
Taking the High and Rocky Road
Junk food gets a nice buzz from legalized weed
According to a new study, sales of chips, cookies, and ice cream have all increased in states where recreational marijuana use has been legalized.
- Here’s where a lazy editor would make a whole bunch of easy weed puns. But I refuse to be pot of the problem. Okay… that’s the only one, I promise.
Ice cream sales put on a little weight around the middle with a 3.1% bump in the aftermath of legalization. Cookies got about 4.1% sweeter. But potato chips stole the crown of King of the Munchies with a fat 5.3% increase.
Profits Ahoy! The boost in sales was almost instant. And while sales of chips and ice cream slid a little in the months following, cookies remained strong. Could cookies be the ultimate backdoor play on weed legalization?
Maybe. But you know as well as I do, the junk food play is just a snack.
The fact is: Whether you like it or not, marijuana legalization is coming to the United States.
Ten states have already fully legalized the green stuff, while another 33 have legalized medical marijuana. And for the first time in decades, legal weed is actually on the cards at a federal level.
Sure, weed might be relatively harmless and has various medical and pain-relieving properties. But you know it’s all because of those sweet, sweet taxes.
In 2015 alone, Colorado collected more $135 million in taxes and fees on weed. That was on sales of $996 million. Sales in North America last year totaled $6.7 billion and is projected to increase $20.1 billion.
Which is part of the reason why:
- 66% of Americans are in favor of recreational legalization including a majority of Republicans and older voters.
- 94% of people are in favor of legalization for medical use in the United States.
That’s nearly 19 out of 20 people.
When was the last time that many people agreed on anything in the United States? It’s unheard of. We’ve seen a drastic increase in voter support over the past several years, and both Republicans and Democrats want to make it happen.
Which is why hungry investors are looking to marijuana stocks for their main course.
Big Pharma Plays Possum
Purdue to file for bankruptcy to duck lawsuits
OxyContin-peddler Purdue is staring down the barrel of 2,000 lawsuits accusing the drug maker of contributing to the deadly opioid crisis.
So of course, the company plans to do the only thing a self-respecting big pharma company would do when faced with the consequences of its actions…
It’s going to file for bankruptcy so it doesn’t have to deal with the consequences of its actions.
The lawsuits are accusing Purdue of using deceptive practices to push addictive drugs that led to fatal overdoses. But reportedly, the drug maker isn’t interested in a fair fight.
They’ve heard this song before and they know how it goes. In 2007, Purdue plead guilty to misbranding OxyContin and agreed to pay a total of $634.5 million in penalties.
Instead, they’ve sneakily hired a team of lawyers to help them file for Chapter 11 bankruptcy. Doing so will put a stop to the lawsuits and allow Purdue to negotiate legal claims with plaintiffs on their own terms.
Purdue has held discussions to resolve the litigation with plaintiffs’ lawyers, who have often compared the cases to widespread lawsuits against the tobacco industry that resulted in a $246 billion settlement in 1998.
As the news of Purdue’s little plan to file for Chapter 11 started making the rounds yesterday, painkiller stocks dipped deep into the red.
Endo Pharmaceuticals (NASDAQ: ENDP) closed at ↓-16.99% yesterday and continued to plummet when the markets opened this morning. Titan Pharmaceuticals (NASDAQ: TTNP) closed at ↓-6.49% while Insys Therapeutics (NASDAQ: INSY) closed at ↓-2.15% and dropped almost another 8% this morning.
The Wizard of Overpriced Drugs
“Pay no attention to the jacked-up insulin prices behind the curtain”
Pharmaceutical giant Eli Lilly (NYSE: LLY) announced a new half-price alternative to one of their popular insulin products.
“My favorite insulin”: I say popular, but when you need something to live, I’m not sure if popularity comes into it.
The new “generic” version will be the exact same as their Humalog insulin brand and cost $137.35 for one vial and $265.20 for a five-pack of pens. (What a bargain!)
The announcement comes as a transparent effort to shift focus away from their ludicrously priced insulin products — which have become the center point of a bipartisan assault on high drug prices.
Back in the 1970s, folks suffering from diabetes could buy a bottle of insulin for just $1.49. By 2001, that price had risen to around $34. By January of 2017, the same vial had rocketed to $270.
Irl Hirsch, one of the nation’s foremost diabetes experts, has Type 1 diabetes. He recently told WebMD that he remembers paying 75 cents for a vial of insulin in the 1960s. But those days are long gone:
Yesterday afternoon I saw seven patients, and four of them, because of the expense, were going to Canada to get their medicine. We’ve never had a situation where people are stretched so thin to purchase a medication they need to stay alive.”
Last week, the Senate Finance Committee held a hearing on the high price of drugs in the U.S.
It’s refreshing to see someone on the hill actually take notice of a crisis which has plagued our nation for decades. But mark my words, I’ll be a much older man before we see any real action on this issue.
Until then, I recommend checking out this free guide to reducing your medical costs and circumventing some of the worst parts of our broken healthcare system.
ONE LAST THING
How did these guys start a $14 billion industry?
Almost 100 years ago, 14 men crammed into a cluttered auto shop in downtown Canton, Ohio.
Resting on running boards and folded up on fenders, they passed around a cold bucket of beer and unknowingly changed the landscape of American sports forever.
It didn’t hit the presses at the time, and if it had, no one would have cared.
These men were part of a disorganized and underfunded group of regional “professional” football teams. There were only 11 teams invited to participate throughout the Midwest, most of which have dissolved and been lost to history.
The confederation, known as the APFA (American Professional Football Association) was so unregulated, football historians couldn’t say for sure who the 1921 season champions were until the 1970s.
In short, it was a mess.
A couple of pros: The teams’ dealings with each other were so slapdash that two teams had the same name — the Pros. (Real original, guys.)
Yet, from those humble beginnings, the NFL went on to become the biggest and highest earning sports league in the world, single-handedly bringing in $14 billion a year.
But there’s a scrappy new underdog in town that’s giving professional football a run for its money.
Last year, this rapidly growing sports trend brought in a revenue of $906 million. And this only the beginning.
This industry is in the early stages of its own story. And it’s going to completely change the way the next generation watches sports.
Can you guess what it is? Email me your guesses and I’ll reveal this world-changing mystery trend tomorrow.
If you can’t wait… click here for the full story now.
Closing Data for 3/4/19:
|S&P Index 500||2,792.81||↓ 0.39%|
- General Electric (NYSE: GE) took a dive of more than 4% this afternoon after announcing that it faces “significant known headwinds to 2019 cash flow.”
- Stocks of Canadian Aurora Cannabis (ACB) soared 9% after leading analyst for Cowen & Co. said Aurora was “uniquely positioned to drive leadership in both share and profitability.”
Click here to send us your comments and tell us what you think. Do you agree with us? Do you think our ideas are stupid? Bring it on. We can take it.
Hi Shane! I like this new letter. You asked, “Is Elon Musk an eccentric Genius or Certified Ding Dong?” I’m going to say he’s neither—he’s a typical billionaire elitist with more dollars than sense.
It’s so typical. He made his money, now he’s just flaunting it while he plays with his toy rocketships and cars and sexbomb model girlfriends. His businesses aren’t going to change the world; it’s just pure ego!
And we have to suffer while “Saint Elon” throws billions of dollars out the airlock while everyone on this spaceship called E-A-R-T-H starves for true innovation that could make the middle class richer!
– Nancy M.
That’s a fair read, Nancy. Despite everything Elon’s done and said — or perhaps because of it — the Cult of Saint Elon is alive and well (see: Twitter). Of course, I’d be lying if I said I wouldn’t build an $800 million spaceship and shoot it the moon if I had the dough to bankroll it.
It makes me feel sad for America that a wall made out of plants is the best idea I’ve heard from a politician in months.
— Justin F.
Our entire research department agrees with you wholeheartedly, Justin.
Hi Shane, you mentioned cannabis. I’d also like to hear what you think about the future of ‘big pharma’… Eli Lilly will begin selling generic insulin at half-price… Will this be the new norm as the pressure against big pharma mounts? How you think this market will change – or stay the same – in our lifetime? Looking forward to your response.
— Ed B.
We touched on this in some of today’s stories. But the truth is that the future is grim for Big Pharma and U.S. healthcare in general. I discussed this recently with a healthcare expert who’s been following the industry closely for more than a decade now. He believes that the only way to fix the current system is to allow it to implode and rebuild it from the ground up. The good news is will likely happen very soon. The bad news is it will be chaos until the new system is set up.
- American Airlines kicked a mother and baby off a flight because of the woman’s dry skin. Yet another airline showing off its impeccable customer service.
- Free porn blocked in the U.K. Time to invest in British smut?
- KFC opens a communist-hero themed restaurant in China. Because nothing says “Communism Works!” like a U.S. franchise selling chicken and mashed potatoes by the bucket.
- A nude version of the Mona Lisa, possibly drawn by the master himself, has been discovered. This is the closest thing the U.K has to free porn right now.
Editor, One Last Thing